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2 WHAT IS “AR” AR is defined in numerous ways What will your staff understand that will help with ownership? Number of days from final billed to payment in full (at all) = complete AR ownership Number of days from discharge to PIF = shared ownership with HIM

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4 More definition of terms Lost charges –sent to the floor, never charged for; charted, never charged Late charges – claims dropped off IT, then charges submitted. Cost of both – if identified, adjusted bills sent to the payers. Patient receive 2 statements –from payers and facility.

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5 Understanding Reimbursement Remittances –payment document from the payers What type of payment arrangements are hospitals experiencing thru contracting as well as federal and state mandated: Prospective payment systems – payment based on something besides charges: Diagnosis, CPT codes, care plans. (EX: Medicare PPS: Inpt/DRG; Outpt/APC) Fee for service – payment based on charges Per Diem – payment based on a per day rate Capitation – payment based on covered lives, per member, per month Critical Access hospitals - %billed chrgs/out; per diem/in

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What are some Key elements to Reduce Bad Debt Exposure? Identify our new self pay patient. With insurance/large balance; Employed without insurance; unemployed without insurance. Create an environment of communication – early, during and after the encounter Create clarity on expectations Create clarity in ownership of each step within the revenue cycle –with accountability Create tracking and trending/TNT throughout the pre, during and after the visit—and ACT to change when patterns are identified. 8

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Defining Our New Patient in the Revenue Cycle Unemployed with no insuranceEmployed with no insurance Employed with high deductible and high coinsurance Employed with historical insurance Insert into each box: 1)How pre-admission will be handled 2)Pt portion assessment 3)Financial assistance options 4)Timely follow up 9

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10 Key owners within the Revenue cycle Pre-admission – financial counseling, scheduled admissions, verification Admission – verify all information/update Charge capture/entry – depts understand chrgs are due day of or day after. HIM – hold days are for coding-not charge entry Billing – submits a clean claim from HIS

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Idea: Service Line Deposits Preadmission – scheduled surgeries, procedures, high dollar outpt areas Create a dollar threshold that is tied to each type of scheduled environment EX) $400 Ortho outpt $500 Cath lab; $150 Endo Incorporated into the pre- admission dialogue –with or without insurance. If employed physicians, coordinate the service line deposit to include the professional component. Split the 1 payment between both based on average charges. (EX: hospital 60%, physician 40%) Staff must be trained as financial counselors –even if the registration staff is completing the above work. 18

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Idea: Train thru scripting – PRE and POS Registrars must be trained on a) how to ask for money, ABNs, form completion, etc, b) how to put the pt at ease thru the process, c) how to spot potential problems and d) how to communicate all the above. Scripting- which is the written dialogue of how to do the above items – is the key to long term success. Practice, practice, practice “ Thank you for choosing ABC hospital for your upcoming GI procedure (or today.) To help reduce financial surprises, we have reviewed your BC benefits and have found that there is an unmet self pay portion due from your deductible of $850 plus your plan is a 70/30 plan which means you will owe 30% after the deductible is met. Outpt balances are due in 90 days with a deposit today of $150 but if you are going to need assistance I would be happy to schedule an appt with the financial counselor of the hospital.” Lots of variations 19

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Looking at Point of Service With an aggressive Pre-admission program, only direct admits, low dollar outpt and ER will be ‘unknown ’. Set the expectation of Payment… Dear Valued Patient letters Posted signs on payment due at time of service –with assistance if necessary Train registration staff on standards, scripting Create service line deposit. (EX $100 MRI) 22

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More Point of Service Ideas Are you ready to provide the pt a bill at discharge? What needs changed to be able to do this or an estimate? How is late activity tracked and trended? How are hold days in HIM evaluated and trended? Can you do an estimate of amt due with insurance interface? (real time adjudication) 23

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25 More Next Steps Look at individual areas: Admitting, HIM, billing, ins resolution and collection. Then create measurements for each area Finally, roll out HIPAA transaction sets to find the three wins EX of area specific standards: # of days to code = 3-5 within the hold days. Track by reason, by physician delays beyond. Also # of days paper records: floor to HIM, to prep, to code. # of days to submit a clean claim= 0. Track all manual interventions with delays. # of days to submit to 2 nd payer after primary=1. Determine manual vs electronic, use HIPAA 837

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Dear Valued Letter Sample Every registration, every time Dear Valued Pt- Thank you for allowing ABC hospital to serve your health care needs. To eliminate financial surprises, below is pertinent information related to your visit. If you provide current insurance, we will be happy to bill it on your behalf as there are specific codes that are required for accurate and timely billing to your payer. You will receive bills from other providers. (List them) All balances are due within 90 days from date of service. If you will have problems meeting that requirement, please call our financial counselors for financial assistance. Are you a Medicare patient? Any oral medications given in an outpt setting are not billable to Medicare as hospitals are not covered under the Part D benefit. Ask us if you have questions. Again, thanks for allowing us to service you. Signed: Director PFS or similar leader 27

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Common questions in AR management Q: What % of the pt portion balance would you expect as a standard payment? A: Tough as each pt will need their financial ‘ability to pay’ reviewed thru the use of a financial statement. Using credit policy as the guide, determine the pt’s ability to resolve the balance within credit policy. If they cannot, begin the process to determine what their ability is to pay the balance. Identify expenses vs disposable income left to pay the balance. Identify expenses that could be reduced or that may be paid off soon – adjust payment to reflect new disposable income as it becomes available. Utilize the financial assistance policy to determine if additional reductions can be made on the balance. Sliding scale, partial reductions, etc. 28

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More fun questions Q: When does the value of the balance drop? A: Historical information has shown that the balance looses value after it is 90 days old. Usually drops to $.10 on the dollar. Hey, why are some providers/facilities waiting until 90 days to begin working on the acct? Huge opportunity to reduce bad debt and improve patient satisfaction thru reducing their unplanned financial surprises thru Pre-Admission, estimates, eligibility verification, and financial discussions prior to any procedure or immediately post ER visit. Most patient’s pay because they feel we care…not because we have a hammer 29

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Revenue and Reimbursement Boot Camp32 How to Outsource? Fee for service arrangement Commission on collections as they are made Incentives for quicker collection or improved collections Get the cash now Sell the Bad Debt Sell all Self Pay A/R

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Bad debt ideas Pre-collect letter – from hospital’s legal counsel or collection agency. “One last chance” Paro/credit scoring used in conjunction with collection agency work. Require skip tracing to be done by agency Develop a collection agency report card Includes % rate, with legal separated Includes pt complaints Includes onsite visits Includes reports with historical patterns Includes any accounts that were turned with insurance pending Includes required incomplete information 33

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Admitting Quality Program Do you audit for accuracy? What is the criteria to know it is right or are the blanks just filled in? What type of error education is occurring ? Evaluate the value ofauditing all pt types or audit high risk areas. EX) ER night shift, ER weekends = high risk areas. Rotate out of these isolated shifts infrequently. 36

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More better practice ideas Service line deposits in all areas: a) pre/scheduled, b) point of service/outpt, ER with consistent credit policy standards but flexible as necessary. Scoring on ‘collectability’ prior to performing collection activities Pre-collect letters prior to collection agency full referrals (MVRMC) Refer to Budget Counselors as an alternative (Veazie) 38

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Denial prevention- Tracking and Trending Using the Remittance Advice + input from employees + patient concerns and complaints = identify patterns. Denial tracking and trending is about preventing, not monitoring. Change the process. (Ex: Medicaid Name & #. Aggressively audit all pre-registered plus day of service registrations. Implement 270/automated eligibility for all registrations.) 39

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Ideas to audit Days to pay per payer, per type Manual edits to claims from the main frame-who and why Charity policy implementation Sign off authority for write offs Reason for ‘hold’ in HIM beyond computer generated/mandated hold days Denial or partial payment patterns from RAs 40